Moving countries can crystallize gains you hadn’t planned to realize. This is how families reduce the damage.
Know your triggers. Some countries impose an exit tax (a deemed sale of assets) when you cease to be tax resident. Others tax based on domicile or impose departure charges on pensions or company shares.
Inventory the asset base. List shares, funds, carried interest, options, IP, and loans. Determine which are “in scope” on exit.
Sequence beats speed. Exercise options, close out PFICs or fund units, or restructure loans before the exit date if it improves outcomes.
Treaty tie-breakers. Dual residency conflicts can be resolved by treaty tests—permanent home, center of vital interests, habitual abode, nationality. Keep contemporaneous evidence.
Landing zone planning. Ensure the destination country’s treatment of subsequent disposals is understood. Sometimes waiting one more year after arrival changes the color of gains.
FAQ:
- Can I change residency mid-year? Yes, but split-year rules vary.
- What about trusts? Grantor vs non-grantor treatment can shift dramatically on exit. Editor’s Note: The most expensive words in mobility planning are “we’ll fix it after we move.” Tags: Exit Tax, Mobility, Treaties